Want To Know How Well Your Pricing Team Is Capturing Commercial Strategy?
Nothing boosts profits more than high performing pricing and revenue management teams.
This is why assessing a series of factors known to influence a pricing team’s ability to drive commercial strategy — such as mission, commitment, capabilities skills, abilities, potential, morale, team norms, incentives — is the best way to examine how well your pricing team is capturing commercial strategy, and see what levers might be most effective for improving performance, productivity and satisfaction.
- Ensure you hire the best pricing manager for your team
- Find out if your pricing team is working at the highest level
- Help members of a team become more aware of how it functions
- Make your pricing team a revenue generating machine
- Boost profits with a high performing pricing team in less than 3< months
Download your Executive leadership guide to Commercial Capability Building
THE NUMBER 1 MISTAKE
The biggest mistake CEOs can make right now is to recruit, promote and move people into the pricing team without assessing them against organisational pricing capabilities, culture and peers in similar pricing roles and industries.
Hiring someone based on experience or star power does not tell you whether they will be able to do the job you want them to do or if they have the potential to succeed in a strategic pricing role.
Relying on performance reviews and internal evaluation often fails to pinpoint the unique traits and characteristics of high functioning pricing and revenue management teams.
Holding employees accountable for what they did in the past, at the expense of improving performance now and in the future, cuts short any development focused conversations between managers and employees.
Using a multi trait assessment framework designed for pricing and revenue management teams ensures you are assessing the factors known to influence individual and team success. Leveraging existing research and data available on high performance pricing teams removes the bias and heuristics that so often cloud human judgment.
WHAT CHANGES ARE INFLUENCING PRICING MANAGER SKILLS
According to HBR, c.88% of organisations with more than 100 employees rely on assessments such as aptitude or personality testing to understand an individual’s unique traits and abilities for entry, managerial and senior roles.
In fact, they show that assessments are used for 72% of middle management positions and up to 80% of senior roles, compared with 59% of entry-level positions.
Our research shows that domain specific testing and expert coaching feedback and evaluation can both identify the right pricing manager for a strategic role and guide their skills development across a complex pricing project to produce outcomes faster.
Capability testing at the organisational, team and individual level reveals exactly how pricing works in an organisation, and the traits and skills that matter most to drive business critical outcomes — invaluable information for leaders, employees and external candidates either driving new commercial strategy and/or contemplating a career move into pricing or a new pricing function.
Read more about pricing and sales skills here.
IMMEDIATE RISK TO PROFIT
A pricing team can be a lever for profitable revenue growth. However, it can also be a major source of margin loss if team capabilities are left unchecked.
If a pricing team is thriving, for example - displaying all the requisite pricing skills, qualities and behaviours of a high functioning team - and has a clear development plan to sustain its high performance, they can generate between 2 - 9 % more margin each year.
However, if the pricing team is not functioning to its best; and doesn’t know why or how to improve; a pricing team can lose on average 2 percent points of margin each year; and more if the teams’ role is mission critical to bottom line profitability.
A number of risks occur when a pricing team is not functioning well or displaying lacklustre performance:
- Individuals make costly mistakes or overlook key tasks that are required to achieve project milestones.
- The team has strained interpersonal relations with other teams and customers.
- The team is not communicating well with its leader and can’t make the leap to bridge gaps in performance.
THE COSTLY ROAD TO RECOVERY
At Taylor Wells, we have assessed, evaluated and coached many different pricing teams and managers throughout the years: Including:
- An established ASX pricing team struggling to unlock their capability to drive profitability because their skills did not go beyond cost plus pricing
- An ASX retail pricing manager with a spectrum of dysfunctional behaviours that were so bad the entire team quit
- An FMCG Revenue Manager that couldn’t meet personal or strategic objectives even though they had all the potential in the world.
- Another senior FMCG revenue manager that made the same costly mistakes for over 4 years without being given feedback or development opportunities to improve
- A telcos pricing manager with such low energy levels and enthusiasm that other teams rarely sought his advice
- A team of star B2B pricing analysts going nowhere because their manager didn’t know how to lead or manage them
It can take 2-5 years to identify the causal drivers of underperformance, dissatisfaction and toxicity. Another 6 to 9 months for managers to feel ready to address team problems. A further 6 to 12 months to work through the performance review process. This starts with the uncomfortable conversations about performance gaps. Followed by a tense time of providing feedback and monitoring them and the team's performance. Then, finally, if none of that works, another 3 - 6 months to make tough decisions to either redeploy or remove someone from their role or business.
While the team is in this state of ‘performance limbo’, it is probable that 3-9 percentage points of margin are being lost across the total addressable revenue they were managing.
Download your Executive leadership guide to Commercial Capability Building
HOW TO ACCELERATE COMMERCIAL STRATEGY THROUGH PRICING MANAGER SKILLS
Finding the true drivers for high performance, and then getting people to work together isn’t easy. And unfortunately, many leaders skip over the basics of team building in a rush to start achieving goals.
But if you're called in to turnaround a team or department, here's Rule One: make it clear. You don’t have the time or resources to develop your talent in the old way.
Don’t wait to see if a performance review reveals better group norms. Don’t leave it up to individual team members to work things out and establish clear goals. Don't waste time asking teams to play nice and work together. Rather, use comprehensive changement devices. Then, make things happen to create an environment where everyone feels comfortable and motivated to contribute.
We have developed a proven system of pricing team assessment, evaluation and coaching. This will ensure your pricing and commercial teams are critical enablers
This unique and proven system has supported many pricing and revenue management teams to deliver the results expected of them. This applies to both teams whose work was deemed to be not up to par and high performance teams looking for new ways to improve.
Our model of assessment has 3 elements:
- Organisation Pricing Culture - a simple online assessment that measures your company’s pricing capabilities, behaviours, and norms against a global database of more than 341 others.
- Pricing Team Health Check - Pricing skills testing and assignments that measure team members skills and abilities against a database of more than 4,243 pricing managers and peers in other similar industries.
- Individual performance reviews - 1-to-1 sessions and performance reports with talent segment experts to provide clarity and open discussion on mission critical capabilities, objectives and personal development goals
OUR APPROACH IN BUILDING PRICING MANAGER SKILLS AND CAPABILITY
At Taylor Wells, we strongly believe that you have to be honest with people. You have to tell them the truth about their performance. Do it in a fair and compassionate way but also using the pricing language and metrics they understand. You have to tell it to them face-to-face. Then, you offer coaching feedback and development plans. This gives them a chance to turn their own situation around.
Our unique system has been specifically designed to avoid ambiguity, bias, misunderstanding, and “unsubstantiated opinions using:
- Our benchmarking data across multiple factors of high performance pricing and revenue management
- Ongoing data analysis and research on the pricing talent segment since 2010
- Evidence-based-performance guidance from talent segment and pricing experts
Learn more about our sales skills and pricing and revenue management teams capability building approach here. But it’s not until you understand how people think, what they know and value; and look them straight in the eyes when you give them feedback, that you get to the sources of who they are, and what they are truly capable of.
Connect with our commercial capability building service
THE PROCESS OF BUILDING PRICING MANAGER SKILLS AND CAPABILITY
Our system is rolled out from the top starting with:
- Initiating Diagnostics - Stakeholders and pricing teams complete an online pricing assessment.
- Phased Pricing & Commercial Assessments - Pricing team complete online and face to face assessments.
- Development feedback and coaching advice - all team members are offered 1-2-1 sessions with our talent segment specialists.
- Post Evaluation Performance support - expert coaching for pricing manager or leader, targeted workshops, digital learning, train-the-trainer sessions at pivotal inflection points of their development plan and pricing roadmap.